How Cashback Works and Different Ways You Can Take Advantage

Please note all examples are correct at the time of writing but are subject to change overtime. The examples provided are not an exhaustive list and I recommend doing your own research as well. 

What is Cashback?

Cashback is the concept of spending money to get some money back. You can get cashback in a number of ways, these include using cashback websites, cashback credit/debit cards, prepayment cards and cashback apps. You can use these avenues to get cashback on the money you were going to spend anyway. This is a good way of reducing your outgoings without compromising on quality. The biggest thing to remember is to use cashback sites for what you’d usually be spending, not to tempt you into spending for the sake of getting cashback. 

Cashback Websites

These are websites that you must first log in to before following a link to the intended retailer and making your purchase. The website then tracks your purchase and gives you the cashback at a later date. You can then choose to cashout either via Paypal, bank transfer or vouchers. There can be restrictions such as not using any discount codes, new customers only or for the purchase of certain products only. The cashback can take a long time to get back to you and many times the purchase can fail to track due to cookie issues, which can make this method quite unreliable. The cashback rates on these websites, however, can be quite significant compared to the other methods discussed in this post so they’re worth checking out if you can find an offer that meets your needs. 

Cashback websites tend to have a tiered membership where the free membership has lower cashback rates to a subscription service. 

Some websites include:

• Quidco: www.quidco.com 
  • I use Quidco for larger purchases such as mobile phone contracts, insurance and travel. 
  • An example at the time of writing is to get £9.75 cashback for an annual Disney+ Subscription.
  • Quidco has a free basic version and paid for premium version
• Topcashback: https://www.topcashback.co.uk/
  • I use Topcashback in the same way as Quido and tend to compare the two as they both have similar retailers and deals. 
  • An example at the time of writing is 8.5% cashback on an online purchase of wine from Cellar by Waitrose & Partners. 
  • Topcashback has a free basic version and paid for premium version
• Kidstart: https://www.kidstart.co.uk
  • Kidstart is a free website that allows you to save cashback from your usual shopping into an account for a child. It does not have to be your child and can be any child. You can also donate the savings you make to a school or charity. The website interfaces with some high street banks so the savings can be directly paid into the child’s bank account. Family members such as grandparents, aunts and uncles and also sign up and their usual shopping can earn cashback for your child. 
  • An example at the time of writing is 8% cashback for new customers on Click and Collect orders over £40 at Sainsbury’s. 

Cashback Apps

There are a whole range of apps available that give you cash back on your shopping. They vary in mechanism, some require you to purchase an instant e-giftcard whilst others require you click through their app to make a purchase. Note the websites above also have their own apps but I’ve made a separate section for ones that are apps only. Every app works in a different way so I’ve included the app, how it works, and some examples. The benefit of using e-giftcards is that you can stagger them with discount codes, for example, from Blue Light Card, student discounts and NHS discounts. 

• Jam Doughnut: App downloaded from the iOS appstore and Google Play
  • This app works by allowing you to buy instant e-gift cards for the retailers on the app with a % cashback that you received instantly. You can then use the cashback to buy more e-giftcards or withdraw them to your bank account. There is a tiered range of cashback and you get the most for using your banking app directly.
  • I mainly use this by buying a lump sum giftcard (£200-£250) for my usual supermarket and chipping away at it when doing my usual grocery shopping. For example, you can currently get 4% cashback at Tesco (in-store only). 
  • This is one of my favourite apps as it allows you to make a saving on the giftcard itself and you can stagger discount codes and loyalty points on top. For example, for a meal at Nando’s, you can use your NHS discount to get 20% (max £4) off, accumulate the loyalty rewards AND get an instant e-giftcard for the exact value with 7% cashback. 
  • It’s the only place I’ve seen that offers cashback at Aldi (comes and goes), Morrison’s Fuel (also comes and goes) and the only other place I’ve seen for Apple (the other being Kidstart).
• Everup: App downloaded from the iOS appstore and Google Play
  • This app works very similarly to Jam Doughnut, except not only do you get instant cashback, you also get bonus coins that you can use to play on their casino-style games in-app. The games give you a chance to win cash prizes. 
  • Retailers are very similar to JamDoughnut but are competitive. For example you can get 4.5% cashback on an Amazon giftcard + 3.1k bonus coins for every £1 spent. 
  • You can cash out via bank transfer or buying an e-giftcard and e-giftcards are purchased either as an instant bank payment or using apple/googlepay. 

• Sprive: App downloaded from the iOS appstore and Google Play
  • This app connects to your existing bank account and mortgage lender and uses AI to identify small overpayments you can make to reduce your overall mortgage. 
  • It only covers the following mortgage lenders at present: Barclays, Coventry BS, First Direct, Halifax, HSBC, Natwest, RBS, Santander, TSB, Virgin Money and Yorkshire BS and you can sign up to a waitlist and let them know your lender so they can contact you if they support your lender in future. 
  • The app first reviews your spending and identifies small amounts of money you wouldn’t miss and automatically overpays this into your mortgage account. 
  • You can then also make purchases via their connected retailers and the cashback is also paid towards your mortgage. 
  • You tell them your mortgage overpayment terms so they don’t overpay more than the allowable amount per your mortgage terms and conditions. 
  • It has a user friendly interface that allows you to see how much you’re reducing your mortgage term and interest costs by.
• Airtime Rewards: App downloaded from the iOS appstore and Google Play
  • This app works a little differently and basically gives you cashback on various purchases you make on your linked bank card. These are directly paid to your mobile phone provider to reduce your mobile phone bills. 
  • Only O2, EE, 3, Vodafone and giffgaff are supported.
  • You link your bank card(s) to the app and it automatically assigns cashback for relevant purchases. You don’t have to actively do anything once your bank card and mobile phone account are connected.
• Shopmium:  App downloaded from the iOS appstore and Google Play
  • This app works not for certain retailers but for certain products. You buy a certain product that the app is advertising (sometimes there’s 100% cashback), upload your receipt and receive the cashback in your app. 
  • The supermarkets you can use are Sainsbury’s, Asda, Tesco, Morrisons and Waitrose. 
  • You can also store all your grocery loyalty cards (Nectar, Clubcard etc) all in one place on the app. 
  • It’s a nice way of getting the odd bit of cashback or trying a new product for free but it’s not as lucrative as the apps above. 

Cashback Credit Cards

These are used as you would a normal credit card but you get a pre-arranged percentage back on your spend. This is usually added back to your credit monthly or annually. The cashback rate could be specific to different types of spend (e.g. energy bills, groceries) or a flat rate on everything you use the credit card for. Often there is a cap on how much cashback you can earn. I personally don’t use these as they can be more restrictive and the incentive to spend can cause credit card debt to increase if you’re not paying off the balance at the end of each month. 

Most cashback credit cards do attract a monthly fee. Examples include:

• Amex Cashback Everyday: 5% cashback for 3mths (max £100), then up to 1% cashback after (minimum spend of £3k/year required). 
• Santander Edge Credit Card: 2% on most purchases up to £15/mth for 1yr, 1% after, £3mth/fee. After the 12 months at 2% are up, the cashback drops to 1% – factoring in the £3/mth fee, the max cashback you can get each month is £12, which requires a £750/mth spend in year one and a £1,500/mth spend each year thereafter.
• Asda Money Credit Card: 5% cashback on Asda spending only up to £50 in Asda pounds in the first 90 days. Plus, get an ongoing 1% cashback on shopping at Asda, which includes spending at George.com and filling up at Asda petrol stations. Plus there’s 0.3% cashback on purchases elsewhere. Rather than receiving cashback directly, you collect ‘Asda pounds’, which can be converted into discount vouchers – you can then use these online or in store. Asda pounds expire after six months – you can convert them via the Asda Rewards app.

Cashback Debit Cards

These are current accounts with debit cards that give you cashback on your spending. There aren’t many of these around and there may be a few for some:

• Chase: no monthly fee, 1% cashback for the first year capped at £15/mth, Exclusions include crypto, debt repayments, estate agent fees and gambling transactions. 
• Santander Edge: 1% cashback on essential grocery shopping and transport- capped at £10/mth. Fees of £3/mth.1% cashback on household bills paid via direct debit capped at £10/mth. 

Prepaid Cashback Cards

This acts as a pay-as-you-go debit card where you add money to the card and it’s accepted at most places (except pay at pump fuel, car rentals etc). Since you can only spend what you’ve pre-loaded, there’s no risk of ending up in overdraft and there’s no credit check required. They’re great for budgeting as you can only spend what’s on the card and great for getting kids used to spending using a card as you can pre-load their pocket money on the card. 

There are prepaid cashback cards that are specifically for healthcare-sector workers including:

• Ode: £2.99 annual fee (free for first year), min age 18, cashback at over 80 retailers, no cash withdrawals- https://healthservicediscounts.com/nhs-cashback-card

HyperJar: Up to 2% cashback for new customers, up to 20% instant cashback by pre-paying with vouchers at 90+ brands. Fee free- https://hyperjar.com